Oil prices continued to climb on Thursday as diplomatic efforts between Washington and Tehran unfolded against a backdrop of heightened military maneuvers in the Middle East, raising concerns about potential disruptions to global crude supplies.
By 07:35 GMT, Brent crude had gained 23 cents, or 0.3%, to $70.58 per barrel, while U.S. West Texas Intermediate (WTI) rose 25 cents, or 0.4%, to $65.44 per barrel.
Both benchmarks had surged more than 4% in the previous session, marking their strongest settlements since January 30, as traders incorporated escalating geopolitical risks into pricing.
“Oil prices are rallying as the market becomes increasingly concerned over the potential for imminent U.S. action against Iran,” ING analysts said in a Thursday note.
“For oil markets, the concern is clearly what action would mean not only for Iranian oil supply, but also broader Persian Gulf oil flows, given the risk of disruption to shipments through the Strait of Hormuz.”
Iranian state outlets reported that the Strait of Hormuz was briefly closed on Tuesday, although it was not confirmed whether full operations had resumed. Roughly 20% of global oil shipments transit through the strategic waterway.
“Tensions between Washington and Tehran remain high, but the prevailing view is that full-scale armed conflict is unlikely, prompting a wait-and-see approach,” said Hiroyuki Kikukawa, chief strategist at Nissan Securities Investment.
“U.S. President Donald Trump does not want a sharp rise in crude prices, and even if military action occurs, it would likely be limited to short-term air strikes,” he added.
The White House said Wednesday that nuclear discussions in Geneva yielded some limited progress, though significant differences remain. Officials indicated Iran is expected to provide additional details in the coming weeks.
Iran also issued a notice to airmen (NOTAM) announcing planned rocket launches in southern regions between 03:30 GMT and 13:30 GMT on Thursday, according to the U.S. Federal Aviation Administration.
Meanwhile, U.S. naval assets have been deployed closer to Iranian waters. Vice President JD Vance stated that Washington was considering whether to continue diplomatic engagement or pursue “another option”.
Elsewhere, talks between Ukraine and Russia concluded in Geneva without meaningful breakthroughs. Ukrainian President Volodymyr Zelenskiy accused Moscow of delaying U.S.-led efforts to end the four-year war.
On the supply side, industry data provided additional support. Market sources citing the American Petroleum Institute reported declines in U.S. crude, gasoline and distillate inventories last week. That contrasted with Reuters poll expectations for a 2.1 million-barrel build in crude stocks for the week ending February 13.
Official inventory figures from the U.S. Energy Information Administration are scheduled for release later Thursday.
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